And then their downstream folks in their upstream supply chain kind of in parallel. So in the latter part of our forecast, there is a lot more from the manufacturing side. In the near term, it’s a little bit more weighted to the data centers. And you have to remember that for us data centers have been customers that we’ve been dealing with for a very long time. Finance market has been a big data center market for a while. So we’re comfortable with the ramps of these customers, the capacity that they’re asking for in the near term. It’s really that longer-term 2025 when TSMC’s first phase goes full production and then into the out years of the plan when Fab 2 and Fab 3 to full production where some of that manufacturing growth really takes over the plan.
If you look at our IRP over the decade, it’s roughly half and half from advanced manufacturing and data centers. And it’s probably a good way to think about it. There’s certainly more demand out there on both sides than is represented in that IRP. But ultimately, in terms of the customers, we can serve on the pace of infrastructure build-out, that’s roughly the balance.
Unidentified Analyst: That’s perfect. Very clear, and I appreciate it. Thank you for that. And then second on the regulatory lag docket, which of course, you guys already touched on. So following the March workshop, which I’m sure a lot of us tuned into. Noting the yet to be scheduled additional workshops, which you already mentioned. Could you give us your high-level sense of where the proceeding currently stands in terms of the time line overall until we see an alternative ratemaking approach being adopted by the commission and actually available for you to use in rate cases? And also, are there any expected key milestones we should be watching for? And that’s it for me.
Jeff Guldner: Yes. James, this is Jeff. I think the next one to watch for is the June open meeting is likely where they’re going to have further discussion. I think there was some thought it might go on the May open meeting. I think it’s more likely now on the June meeting. That will be important, because I think that’s where you’ll see the commissioners discuss the process going forward and potentially give some more color on the time line. I do think there is an interest — I mean, I think it was constructive in the conversation just in terms of what they were talking about, because it was not only around the potential for a forward test year, which is kind of intuitively what a lot of people think about as the an example of a rate structure or a construct that can address regulatory lag but also more into other concepts like formula rates, which is what we use at FERC.
Obviously, an additional conversation from experts who have worked with these kind of programs. And so the content seems to be moving in the right direction. The schedule is being developed. I do think there’s a desire to continue to move this forward promptly. And so the — one of the things we’ll be watching for is how the process unfolds. I know at some point they’ll have a conversation on whether there’s role making or a policy statement. If you think back to our decoupling workshops years ago, that ended up in a policy statement as opposed to a rule. And so then the policy statement just goes out and then the utilities can implement that when they file rate cases. So we’ll be watching for all that. I expect you’ll see a little bit more probably in the next quarter, but the next key milestone is likely that June open meeting to watch where they talk through a process.
Unidentified Analyst: Thank you very much, Jeff. Much appreciated.
Operator: Thank you. Your next question is coming from Michael Lonegan from Evercore ISI. Your line is live.
Michael Lonegan: Hi. Thanks for taking my question. Going back to the finance — financing plan, you sized the $400 million of additional equity at 40% of incremental CapEx. Just wondering any incremental spending beyond that going forward, how would you expect to finance that in terms of portion of equity?
Andrew Cooper: Sure. And going back — Michael, it’s Andrew. Certainly, there will be opportunities to look at our capital plan in the next few years. And as we see, for example, what projects come out our RFP is on the generation side and the pace of execution of our strategic transmission plan will continue to revisit that CapEx forecast. And fundamentally, I think some of the drivers I talked about earlier, will determine how we fund that, right? We want to make sure that we’re staying in the right spot from our cash flow metrics perspective. And there’s the numerator question there as well on the RFP debt where we want to make sure that we’re reducing regulatory lag through the mechanisms Jeff just talked about to help support those credit metrics.
But again making sure we’re being judicious about parent company debt. And so that 40% of incremental CapEx that paired with retained earnings is the way we would ensure that we maintain that debt plus whatever incremental modest, Pinnacle West could take on is the way that we would maintain a balanced capital structure at the utility going forward. So it’s probably a good rule of thumb to think about. We have a date the CapEx plan or the financing plan. So until we do so and look at all the markets available to us, that’s everything from all of the debt markets that are available to parent. Some of the low-cost financing options we’ve talked in the past in our slides about continuing to look at things like for example the DOE lending program and where we can access cost financing for our customers.
But foundationally I think, some modest amount of equity to make sure that we’re giving a balanced capital structure over time is going to be one of the ways to do it. And we’ll continue both for the — that $400 million needed any incremental need to it continue to look at all those markets.
